MBTRAC
Gold Member
- Joined
- Mar 28, 2012
- Messages
- 391
- Location
- NSW Australia
- Tractor
- Tractors16-600hp Farm & Earthmoving Equip, Trucks etc.
With some of the older gear we run from new & also buy S/H the cost of refurbishment far exceeds the puchase of the unit, & there's no way I could recoup the combined cost of the tractor + refurbishment if I was to onsell - but it does makes sound economic sense on a running capital cost/hour basis , let me explain......
Three examples are a few of our tractors that notionally "have more money into it, than what it's worth" on the used market, that are worth far more to our farming enterprises are pictured below :
JD6030 @212hp 2WD purchased S/H@6000hrs for c.$15K (oil samples fine & engine fine) spent $4K on paint/axles/gearbox so owes me $19K - Still only worth at c.$15K but where am I going to buy a 212hp tractor for 19k that will last at least another 6000hrs (which works out as capital running cost of only c.$3.20ph)
Steiger CP1400 400hp 4WD 29000hrs (yes that's 29000hrs) purchased new & fully written down on tax so owes me zero, recently the whole tractor was rebuilt/renewed (inc. engine /gearbox/axles, the cab retrim ..etc) all up c.$63K should be fine with no other major expense for min. 8000hrs (a capital running cost of c$8.90ph) but worth maybe $25k or less on the market- the similar sized New Holland next to it in the photo still owes me c.$300K as it was purchased new so it's costing me signifcantly more than $8.90pn !!!
White 4-225 220hp 4WD 14500hrs owned since new & again fully written down, total "nut & bolt" restoration/rebuilt/trimmmed/painted (a new exhaust was fitted post the photo ) @ c.$71K now as new, will run fine for another min. 10000hrs (@$7.10ph), market value maybe $20-25K? Cost to replace new c.$200k
Where it all gets a little bit hard to justify, even if you do the work yourself, is mostly sub 100hp, as parts are not incrementally cheaper the smaller the tractor & labour cost are the same - we're fortunate to have our own comprehensive farm workshops/mechanics which makes it easier, but we still have labour on cost & parts to factor into the equation.
We also buy lots of new gear as/when the seasons/finances allow, but with the new gear there needs to be compelling reasons to purchase based on increased (& often task specific) efficiencies/capabilities (not just because it's the latest & greatest)
Three examples are a few of our tractors that notionally "have more money into it, than what it's worth" on the used market, that are worth far more to our farming enterprises are pictured below :
JD6030 @212hp 2WD purchased S/H@6000hrs for c.$15K (oil samples fine & engine fine) spent $4K on paint/axles/gearbox so owes me $19K - Still only worth at c.$15K but where am I going to buy a 212hp tractor for 19k that will last at least another 6000hrs (which works out as capital running cost of only c.$3.20ph)
Steiger CP1400 400hp 4WD 29000hrs (yes that's 29000hrs) purchased new & fully written down on tax so owes me zero, recently the whole tractor was rebuilt/renewed (inc. engine /gearbox/axles, the cab retrim ..etc) all up c.$63K should be fine with no other major expense for min. 8000hrs (a capital running cost of c$8.90ph) but worth maybe $25k or less on the market- the similar sized New Holland next to it in the photo still owes me c.$300K as it was purchased new so it's costing me signifcantly more than $8.90pn !!!
White 4-225 220hp 4WD 14500hrs owned since new & again fully written down, total "nut & bolt" restoration/rebuilt/trimmmed/painted (a new exhaust was fitted post the photo ) @ c.$71K now as new, will run fine for another min. 10000hrs (@$7.10ph), market value maybe $20-25K? Cost to replace new c.$200k
Where it all gets a little bit hard to justify, even if you do the work yourself, is mostly sub 100hp, as parts are not incrementally cheaper the smaller the tractor & labour cost are the same - we're fortunate to have our own comprehensive farm workshops/mechanics which makes it easier, but we still have labour on cost & parts to factor into the equation.
We also buy lots of new gear as/when the seasons/finances allow, but with the new gear there needs to be compelling reasons to purchase based on increased (& often task specific) efficiencies/capabilities (not just because it's the latest & greatest)